Business from Kuwait not coming very quickly Maryland's position not as good as it had earlier appeared to be.

September 05, 1991|By Liz Atwood | Liz Atwood,Evening Sun Staff

Just a few months ago, Maryland businesses looked at Kuwait as the land of opportunity.

The country had been ravaged by war and was grateful to the United States for leading the fight to defeat its invader.

Maryland seemed especially well-positioned after the Kuwaiti ambassador signed an agreement with Gov. William Donald Schaefer in May promising to give Maryland businesses and the Port of Baltimore preference in work helping to rebuild the country.

Schaefer was the only U.S. governor to accompany the emir of Kuwait during his return home after the Persian Gulf War, and the governor dispatched a team of medical experts to treat Kuwaitis.

But business from Kuwait has not come as quickly as expected. Many Maryland companies say they are still bogged down in negotiations. Splits appear to have arisen between Kuwait's government and private sector, reconstruction efforts have lagged and there is growing sentiment that the business might not come at all.

"In spite of all the good intentions, what has come to light is that the situation in Kuwait itself has kind of overpowered all that good will," said Curt Matthews, a spokesman for the Maryland International Division, referring to the persistent turmoil in the country. "I think the situation there transcends any agreement."

Some fire suppressant equipment and other machinery has been shipped to Kuwait through the Port of Baltimore, but few Maryland companies have had success in securing contracts.

Estimates on the amount of reconstruction work to be done in Kuwait have been scaled back drastically from $100 billion to $25 billion. The Small Business Administration recently released a statement saying that most of the work seems to be going to large international corporations and that small businesses might wasting their time. Also, countries with long-standing ties to Kuwait, such as Japan and Great Britain, appear to be in a better position to get the business, some analysts say.

"I think we way, way, way overestimated the business," said Doris Powers, president of Shielding Technologies Inc. in Aberdeen.

That is not to say that she or other state firms are giving up.

Powers is convinced that the Kuwaitis will have need of her bomb disposal units. She has agents in Kuwait and Saudi Arabia trying to sell her products and says the Kuwaitis have shown an interest. She is waiting to hear from them.

Charles Sinunu, international sales manager with Ellicott Machine Corp., said many of the state's businesses had unrealistic expectations. "This la-la land people were living in is starting to hit home," he said.

Sinunu said both state officials and private businesses may have overestimated the impact of the agreement the governor signed with the ambassador.

"An agreement alone isn't going to sign the business," he said.

He speculates that Kuwait officials "may have agreed to things they couldn't possibly live up to."

But he still thinks there are opportunities for companies that have unique products and are willing to make a commitment.

He said his company is waiting to hear from Kuwait on a number of proposals to provide dredge equipment to the region, but it is taking a cautious approach. "We're not going to be in the position to drop everything and jump on a plane if we smell business. We have to be convinced."

Millard Sindler, president of Dover Poultry, is also waiting for an answer. He sent a representative to a Middle East trade show this summer and was excited about the interest the Kuwaitis showed in his processed chicken. But so far, none of the deals have come through and his plant on Hollins Ferry Road sits mostly idle.

The main sticking point in the negotiations seems to be the price of the chicken. "They want to buy it for nothing," Sindler grumbles.

Blase Cooke, president of Harkins Builders Inc. in Silver Spring, said he believes it is too soon for the Kuwaitis to be interested in his building products. "They really haven't gotten in a buying mode yet," he said.

But the more time drags, the more momentum could be lost, he said. "The concern I have is that when the war was first over there was this extraordinary appreciation for America. The longer it takes, it might become less."

He also said American companies need to realize the business opportunities in Kuwait could be limited because damage to the country was not as bad as first thought. "There is not a lot of real construction," he said.

Harkins, like many Maryland companies, has begun to turn its attention to other countries in the Middle East.

Elizabeth K. Nitze, director of the World Trade Center Institute, said she had originally planned to hold a seminar for businesses to brief them on Kuwait opportunities, but she said many players in the international business community advised against it. "Kuwait is not expected to return to pre-war levels," she said. "The business activity has shifted."

Mark Snyder, president of Snyder Body Inc., which makes truck equipment, described the Kuwaitis as "real foot draggers."

Snyder said he has received a number of proposals from Kuwait, but said is also looking to do business in other Middle East countries. "Kuwait was the stimulus to get there, but it's a small part of the business over there," he said.

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